Novartis AG raised $11 billion to help fund its purchase of Avidity Biosciences Inc., adding to a flurry of buyout-related bond sales.\u00a0<\/p>\n
A unit of the Swiss drugmaker sold investment-grade US dollar bonds in seven tranches, with maturities ranging from three to 30 years, according to a person familiar with the matter. A five-year floating-rate note was dropped during syndication, added the person, who asked not to be identified as they\u2019re not authorized to speak publicly.<\/p>\n
The longest tenor \u2014 a bond maturing in 2056 \u2014 will yield 0.9 percentage point over Treasuries, about 0.3 percentage point tighter than initial price talk, the person said.<\/p>\n
Proceeds from the sale will be used to repay a Feb. 26 bridge loan for the $12 billion purchase of Avidity, Novartis said in a filing on Monday.\u00a0<\/p>\n
The offering is the latest major M&A financing to reach the investment-grade bond market, adding to a surge in corporate borrowing even as spreads widen over concerns about the economic impact of the Middle East conflict. Recent acquisition-related offerings include those from Keurig Dr Pepper Inc., Baker Hughes Co., Eaton Corp Plc and Abbott Laboratories.<\/p>\n
Novartis agreed to acquire Avidity in October as part of a push to focus on innovative drugs in core areas including heart, kidney and metabolic drugs, immunology, neuroscience and oncology. The transaction closed last month.<\/p>\n
BNP Paribas SA, Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Mizuho Financial Group Inc. managed the bond sale. The Novartis deal was the largest of eight investment-grade bond offerings totaling about $26 billion on Monday.\u00a0<\/p>\n
Novartis Capital Corp. last tapped the dollar market in November, when it sold $6 billion of notes across seven tranches.<\/p>\n